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GDP Flash: GDP Growth Higher than Expected in Third Quarter Print
Written by Dean Baker   
Thursday, 30 October 2014 07:48

GDP grew at a higher than expected 3.5 percent annual rate in the third quarter. The biggest factors in this growth were a 16.0 percent increase in defense spending, which added 0.66 percentage points to growth; an 11.0 percent increase in the export of goods, which added 0.99 percentage points to growth; and a 2.4 percent decrease in the import of goods, which added 0.34 percentage points to growth. In other categories, consumption grew at a modest 1.8 percent annual rate, while non-residential investment grew at a 5.5 percent rate.

The jump in defense spending is likely an anomaly which will be reversed in future quarters. Defense spending is always erratic and big movements are usually reversed in later quarters. The trade data are encouraging, but may be reversed as the dollar has strengthened in recent weeks, making U.S. goods less competitive.

One piece of good news in the report is that the slowdown in health care spending is continuing. Nominal spending in the third quarter is just 3.5 percent above the year-ago level. It is difficult to determine the extent to which this slowdown can be attributed to the ACA, but clearly the predictions that costs would explode due to the extension of coverage have proven wrong.

 
Does the OECD Think That the South Should Rise Again? Print
Written by John Schmitt   
Tuesday, 28 October 2014 09:55

A post at Wonkblog earlier this month noted that a recent analysis by the Organization for Economic Cooperation and Development (OECD) of regional well-being across its member countries found that the U.S. South was “the worst place to live in the United States.” The OECD --as diplomatic as it is-- did not say this in so many words, but Wonkblog reporter Roberto Ferdman pulled together the OECD's state-level data for the United States and it would be hard to arrive at any other conclusion.

Read more...

 

 
Taxi Alternatives Not Really So Attractive After All Print
Written by Janine Duffy   
Friday, 24 October 2014 14:08

The taxi industry and its start-up offshoots, such as Uber and Lyft, have been dominating the news lately; a simple Google search for Uber news, for example, produces 10.7 million results. SherpaVentures, a venture-capital firm that has invested in a number of start-ups, and whose founder was a large investor in Uber, recently released a report of what it refers to as the “on-demand economy,” which they describe as based on the “instant, pervasive access to goods and services, tailored to individual needs, often without the burden of long-term ownership or commitment.” SherpaVentures, however, paints a positive, but incomplete, picture of what these new forms of economic organization mean, especially for the workers involved. While there is a lot not to like about the report, I will limit myself here to their comparison of traditional taxi drivers and Uber drivers.

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Labor Market Policy Research Reports, October 17 – October 23 Print
Written by Janine Duffy   
Friday, 24 October 2014 09:13

The following reports on labor market policy were recently released:

Center on Budget and Policy Priorities

State “Income Migration” Claims Are Deeply Flawed
Michael Mazerov

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Government Spending on the Forbes 400 Compared with Government Spending on Kids Print
Written by Dean Baker   
Tuesday, 21 October 2014 09:37

It is a popular sport in policy circles to complain that the government spends so much more on seniors that it spends on kids. The gap between spending on seniors and spending on kids comes from taking average Social Security and Medicare benefits, along with some other programs, and showing that is vastly exceeds what we spend on kids. (The calculation usually leaves out state and local expenditures, which accounts for the bulk of education spending.)

The problem with this calculation is that seniors have paid for Social Security and Medicare benefits through the payroll taxes taken out of their paycheck over their working lifetime. According to calculations from the Urban Institute, the typical retiree pays more into Social Security than she can expect to get back in benefits.

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Labor Market Policy Research Reports, October 10 – October 16 Print
Written by Janine Duffy   
Thursday, 16 October 2014 16:01

The following reports on labor market policy were recently released:

Center for American Progress

A Win-Win for Working Families and State Budgets: Pairing Medicaid Expansion and a $10.10 Minimum Wage
Rachel West and Michael Reich

Retailer Revelations: Why America’s Struggling Middle Class Has Businesses Scared
Brendan V. Duke and Ike Lee

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Work-Family Policies Can Stem the Decline in Women’s Employment Print
Written by Janine Duffy   
Friday, 10 October 2014 14:39

Back in 2000, a higher share of U.S. women aged 25 to 54 were employed than was the case for prime age women in six of our peers in the OECD. Newly released data from the OECD (see figure below) show that the rate has declined, in both relative and absolute terms, over the last 14 years and is now the lowest in the group, a trend clearly visible in the graph below. Even Japan, which in 2000 was more than 10 percentage points below the U.S. now has a higher share of prime age women in employment.

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Labor Market Policy Research Reports, October 3 – October 9 Print
Written by Janine Duffy   
Thursday, 09 October 2014 16:00

The following reports on labor market policy were recently released:

Center for American Progress

Harnessing the EITC and Other Tax Credits to Promote Financial Stability and Economic Mobility
Rebecca Vallas, Melissa Boteach, and Rachel West

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Labor Market Policy Research Reports, September 26 – October 2 Print
Written by Janine Duffy   
Friday, 03 October 2014 07:47

The following reports on labor market policy were recently released:

Center on Wisconsin Strategy

Raising the Quality of Childcare: Examples of Private/Public Training Partnerships in Childcare and Other Industries
Jody Knauss and Laura Dresser

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Jobs Flash: Job Growth Picks Up Pace in September Print
Written by Dean Baker   
Friday, 03 October 2014 07:26

The economy added 248,000 jobs in September. This growth, along with upward revisions to the prior two month's data, brings the 3-month average to 224,000. The unemployment rate also dropped to 5.9 percent, the first time it has been below 6.0 percent since July of 2008. In spite of the rapid job creation, there was no change in the employment-to-population ratio which remained fixed at 59.0 percent. In fact, labor force participation fell by 0.3 percentage points for white men in September and 0.2 percentage points for white women.

The number of people involuntarily employed part-time by fell 174,000 to 7,103,000. This is extraordinarily high given the unemployment rate. The number of people choosing to work part time rose slightly and now stands 642,000 above its year-ago level. This presumably is the result of people taking advantage of Obamacare and getting insurance through the exchanges or expanded Medicaid rather than their employers.

By sector, the biggest job gains were in retail (35,300), employment services (33,600), health care (22,600) and restaurants (20,400). Wages have grown at a 2.0 percent annual rate over the last three months, the same as their rate of increase over the last year.

*CEPR's Jobs Flash is published each month upon release of the Bureau of Labor Statistics' employment report. It previews the more detailed Jobs Byte, which is published later in the day*

 
CEPR News - September 2014 Print
Written by Dawn Lobell   
Thursday, 02 October 2014 09:41

The following newsletter highlights CEPR's latest research, publications, events and much more.

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The Big Tax Increase Nobody Noticed Print
Written by Dean Baker and Nicole Woo   
Wednesday, 01 October 2014 08:35

The 2011-12 Social Security payroll tax holiday ended in January 2013, which meant that the vast majority of working Americans faced a two percent cut in their take-home pay. 

Compared to past payroll tax increases, this was an extraordinarily large and sudden one. For example, from 1980 to 1990 the rate was increased gradually by a total of 2.24 percentage points; in no year did the rate rise by more than 0.72 percentage points, or just over one-third of the 2013 increase. (This combines the employer and employee side tax increases. In 2013, the whole tax increase was on the employee side.)

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Today, Health Insurance Fuels Entrepreneurship Print
Written by Janine Duffy   
Monday, 29 September 2014 13:43
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Labor Market Policy Research Reports, September 19 – September 25 Print
Written by Janine Duffy   
Thursday, 25 September 2014 14:04

The following reports on labor market policy were recently released:

Center for American Progress

Innovations in Apprenticeship
Sarah Ayres Steinberg and Ethan Gurwitz

Read more...

 

 
Labor Market Policy Research Reports, September 12 – September 18 Print
Written by Janine Duffy   
Monday, 22 September 2014 13:31

The following reports on labor market policy were recently released:

 

Center for American Progress

5 Policies for Improving Data Use to Accelerate Veteran Employment
Aneesh Chopra and Ethan Gurwitz

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Health Insurance: Healthy for Entrepreneurship? Print
Written by Janine Duffy   
Thursday, 18 September 2014 09:16

A new paper by Gareth Olds finds that the availability of publicly funded insurance may have boosted entrepreneurship by allowing parents to start their own businesses while maintaining health insurance coverage for their children. The Children’s Health Insurance Program (CHIP) provides health insurance to children in families with incomes too high for Medicaid but below a higher cutoff that varies by state.

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Today, ACA Boosts Voluntary Part-Time Employment Print
Written by Dean Baker   
Tuesday, 16 September 2014 10:49

 

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Labor Market Policy Research Reports, August 22 - September 11 Print
Written by Janine Duffy   
Thursday, 11 September 2014 14:13

Labor Market Policy Research Reports, August 22 – September 11

The following reports on labor market policy were recently released:

Center for American Progress

Administrative Action on Immigration Reform: The Fiscal Benefits of Temporary Work Permits
Patrick Oakford


Center on Budget and Policy Priorities

House Bill Would Raise Small Business Premiums and Undercut Health Reform’s Consumer Protections
Edwin Park

State Earned Income Tax Credits and Minimum Wages Work Best Together
Erica Williams and Chris Mai

 

Read more...

 

 
Wage Inequality: A Story of Policy Choices Print
Written by John Schmitt   
Thursday, 11 September 2014 10:09

The September 2014 issue of New Labor Forum includes an article(paywalled) by Larry Mishel (President of the Economic Policy Institute), Heidi Shierholz (until recently an economist at EPI, now Chief Economist at the Department of Labor), and me offering our explanation for the rise in wage inequality since the end of the 1970s.

From the introduction:

The mainstream of the economics profession offers one over-riding explanation for the rise in inequality: workers who have the skills needed for new technologies have done well, while those lacking those skills have fallen farther and farther behind. …We take a different view. We believe that it is possible to explain the entire rise of economic inequality since the late 1970s as the outcome of an array of economic policies that had the easy-to-predict effect of widening the gap between the top 1 percent and the rest.

Over each of the last three decades, macroeconomic policy (fiscal, exchange rate, monetary policies), trade agreements, deregulation of the financial sector, the legal environment governing unionization, the minimum wage, industry deregulation (in airlines, trucking, inter-state busing, and elsewhere), the privatization of state and local government functions, and other policies have had different effects on different kinds of workers, helping some and hurting others. … Together, we argue, these policies can explain changes in wage trends for workers—both men and women—across the wage distribution.

 

This post originally appeared on John Schmitt's blog, No Apparent Motive. September 11, 2014

 
DATA FLASH: Job Growth Slows Further in August Print
Written by Dean Baker   
Friday, 05 September 2014 07:39

The pace of job growth slowed sharply to 142,000 in August. Coupled with downward revisions to June's data, this brings the average rate of job growth over the last three months to 207,000. The sharp dropoff was due in part to flat employment in manufacturing after two months of healthy growth and a drop in employment of 8,400 in retail. Wage growth was little changed. Over the last three months, the average hourly wage has risen at a 2.3 percent annual rate, virtually identical to the 2.1 percent rate over the last year.

On the household side there was little change. The unemployment rate edged down slightly to 6.1 percent, but the employment-to-population ratio (EPOP) remained stable at 59.0 percent. By education level, college grads don't seem to be faring well at this point in the recovery. Their unemployment edged up to 3.2 percent, while their EPOP fell 0.2 percentage points to 72.2 percent. Over the the last year, their unemployment rate has fallen by just 0.3 percentage points, while the EPOP of college grads is actually down by 0.6 percentage points. By comparison, those with some college have seen a drop of 0.7 percentage points in their unemployment rate and a rise of 0.4 percentage points in their EPOP.

 
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